SPAC Digital World Acquisition, ( NASDAQ: DWAC ), which is taking Trump's social media company public, pared a loss after early ticking down 2.3%, amid a New York Times report on Monday provided new details on a regulatory probe into the SPAC and Trump's Media & Technology Group.
Regulators are said to be investigating a surge in trading before the announcement of the deal to take Trump's Media & Technology Group public through SPAC Digital World ( DWAC ), according to the New York Times report. Months prior to the official announcement of the deal in October, word of the deal allegedly leaked to Miami investment firm Rocket One.
DWAC ( DWAC ) disclosed last month in a filing that on June 16 it became aware that a federal grand jury sitting in the Southern District of New York has issued subpoenas to each member of Digital World’s board of director and that the subpoenas sought information on Rocket One Capital.
An attorney for Rocket One denied the firm had any advance knowledge of the deal between DWAC and Trump Media and said that "any assertion otherwise is untrue," according to the NYT report.
DWAC, which is taking Trump's social media platform Truth Social public, in early December disclosed it received voluntary information and document request from the SEC, which sought documents relating to meetings of DWAC’s board of directors, policies and procedures relating to its interactions with TMTG.
The disclosure about the regulatory probes followed Sen. Elizabeth Warren (D-MA) sending a letter to SEC Chairman Gary Gensler requesting that the agency i nvestigate the transaction.
The Warren request followed a New York Times report that Trump's deal with DWAC may have skirted securities laws. The former president began allegedly discussing a potential deal with Patrick Orlando, the founder of the Digital World SPAC well before DWAC went public in September.
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Trump SPAC Digital World pares loss amid new report about regulatory probe